Reorganization of Management Scheme for Local Public Transport in Japan

Transcription

1 Reorganization of Management Scheme for Local Public Transport in Japan Masayuki FUKUMOTO* Graduate student: Graduate school of Nagoya Tel Fax Hirokazu KATO Dr-Eng.: Graduate school of Nagoya Tel Fax Abstract This study suggests a Co-production scheme for local public transport management based on residents participation and role-sharing of main actors rather than typical transportation service system provided by either private or public sector. In order to comprehend the possible advantages of residents participation, previous practices from different regions are classified based on role-sharing, regional characteristics and resources. Then local public transport's characteristics are further examined within the framework of Organization Theory of management science and Club Theory of micro economics. The results confirmed that establishing a purpose and regional organization to realize the proposed scheme is highly required. Keyword Local public transport service, co-production scheme 1. Introduction Japan has already entered an era of declining population and aging society. As one obvious consequence, the country has recently been facing some economic difficulties of decreasing tax revenues and some other problems from the increasing number of mobility handicapped elderly and disabled population. One of particular significance in transport planning is the provision of local public services for such people that can hardly perform their daily activities without an * Corresponding Author

2 efficient public transport service. Local public transport systems in Japan are primarily operated by financially independent companies. Lately, the decrease of public transport passengers and insufficient budget of the local authorities that can hardly provide subsidy make it even more severe for such companies to pursue their financial independence especially in a more car-dependent society. Therefore it is essential to establish a management scheme to develop public transport services while curbing the public expenses at the same time. Although there have been good practices of management and operation schemes to provide local public transport services in Japan, these are still inadequate (Kato, Takasuga, 2003; Nakagawa, Noumura, 2003). In this paper we first outline the basic characteristics of local public transport and relevant serious problems in Japan and then show the recent attempts for collaboration among stakeholders, for example, business entities, local governments, residents and public transport users to suggest one efficient scheme for managing sustainable local public transport services. Then we proposes a new scheme for efficient local public transport management and operation based on the concept of Co-production within the framework of Organization Theory in management science and Club Theory in micro economics. 2. Changes of management scheme for local public transport in Japan Local public transport system in Japan is mainly managed and operated by private companies or public corporations with self-supporting accounting system; private companies maintain most of management and operation costs by fares paid by passengers. This feature is unique to the Japanese local public transport operating system and differs from those of European or American systems. However, since 1970 s, these private entities have been encountering difficulties of maintaining their self-financing status mostly because of the considerable shift from public transport to automobile and progressing motorization due to rapid economic growth (Figure 1). Figure 1 Changes of private car and bus passengers Therefore, national government has been subsidizing the local governments to give financial assistance for private bus operating companies since 1966 (Table 1). But, between 1970 and 1980 there has been a remarkable increase in the amount of subsidies (Figure 2). However, subsidies have recently been stabilized mainly because of

3 two important structural changes. First is the inclusion of the budget allocated for Publicly-operated Bus subsidies in to the general account budget in 1995 and the other is a new system that employs a ceiling introduced to deal with the declining tax revenues. Table1 Changes of bus subsidization systems to bus operation in Japan Figure 2 Changes in amount of subsidy to bus (National budget only) Likewise the experiences in some Western Counties, Japanese management scheme for rural buses has been rather shifting from financially independent to such a system where the government allocates considerable subsidy for maintaining the bus services, in other words from privately-operated buses to publicly-operated buses. Therefore it is evident that establishing an elaborate scheme for financially sustainable public transport management and operation is a major issue especially for providing bus services in Japan. Recently in Japan there have appeared good examples of co-production for operating and managing local public transport filling the functional gap between public and private sectors. There have been earlier practices of collaborative schemes in Europe. For example in UK after the deregulation of regional bus services, a voluntary bus service as called Community Transport was institutionalized by 1985 Transport Act. At the present, Community Transport in UK emphasizes the concept of social exclusion and mainly aims to provide transport service for the people lives in rural areas and for those who are mobility handicapped (Gillingwater, Sutton, 1995; Department for Transport and Greater Manchester Passenger Transport Executive, 2004). It is being managed and operated by national budget under LTP (Local Transport Plan) scheme. Besides there exists another association named as Community Transport Association (CTA) where all the relevant actors of Community Transport work as advisory for the voluntary groups. By 2002 the Japan Road Transport Law for regulating local bus management was revised and Council of Regional Public Transport system was introduced in order to enable competitive market forces on the legal basis for more efficient operation system. As one consequence it is expected that the practices of Co-production type local public transport services will increase in Japan. Therefore our focus is to explore characteristics and problems of these leading practices which will play a crucial role in local public transport facilities of the very near future. 3. Characteristics of local public transport management and operation by Co-production

4 scheme Given the market forces that adjust demand and supply, in most of the Japanese rural areas, bus services are now being provided by private companies. Lately this led to a more private dominant operating system that unless private bus operators supply bus services, efficient public transport services may not be attained in such rural areas. Mostly, the role of local governments was to provide alternative public bus services after the abolishment of some bus routes by the private operators. Such supply of public transport service was generally limited to the cases where the inhabitants and the businesses facilitating along the abolished line claim for an alternative public transport service. The public transport management scheme in Japan is generally characterized by the two distinct management aspects of Private scheme and Public scheme. On the private scheme side, private company operates on a self-accounting system; and on the public side, the local governments take the essential role to provide a minimum level of bus services where the total demand of the passengers can not maintain the revenue for the private operators to enter the market. However since the late 1990 s, a new style for providing public transport services have appeared namely Community Bus that the local government manage and subsidize but the operation is mainly carried out by the private companies. This scheme allowed local governments to offer many bus routes in the rural where public transport service have not been efficiently served. After the de-regulations in 2002, the barriers for the private bus operators to enter or exit the market were relaxed and also abolishment of the unprofitable routes was only left to the private operator s decisions. This triggered involvement of residents and companies conducting business in the regions to develop new and better bus routes acting together with the local governments. This attempt for collaborative frame was the consequence of a separated scheme for planning, operation and management. Bus operating companies have long been in charge of all tasks of planning (determining routes); management (preparing, staffs and vehicles); operation (providing service and collecting fare) but with the acceptance of a separated structure this has shifted to such a scheme that a number of actors can have a role of planning, operation and management in providing local public transport services (Table 2). Given the implemented scheme, co-production of government, private companies, and residents contributed to the development of viable local bus services. Thus, a number of co-production practices providing local bus services have emerged with the involvements of various actors.

5 In this study we suggest a comprehensive framework describing the roles of each five actor: local governments; privately owned local governments; commercial companies, hospitals etc. running business especially along the public transport routes; residents; passengers. Table 3 shows the role-sharing of these five actors by classifying their responsibilities into four key roles: personnel; sharing operation cost; recognizing the current situation; exchange of options. Table 2 The steps of bus service provision Table 3 Classification of key roles In a classical economics approach, the common way of identifying the role-sharing is based on the financial issues, in other words, who will bear how much of the total cost; but when facilitating public services it is necessary to enlarge the scope to include social aspects as given here in this study by the Matrix of Administrative Role Sharing (Table 4). This matrix has following merits; first for enhancing the public participation by enabling the local residents involvement and hence better matching the social needs. Next by clear defining the role of each actor, win-win partnership and benefits are better utilized both in terms of social and financial gains. This matrix also provides a fundamental framework for comparing some typical practices of collaborative local public transport management and operation in Japan. Table 4 Matrix of Administrative Role Sharing 4. Effectiveness of Co-production scheme for local public transport management (a) Classification of scheme for local public transport management Four different types of local public transport schemes were summarized based on the introduced concept of Matrix of Administrative Role Sharing. 1) Bus operating company-driven: Common local public transport management and operation scheme in Japan that the bus operating company is financially independent where the fares are the sources of revenue (Table 5). Table 5 Bus operating company-driven 2) Local government-driven: Community Bus is a typical example. Local government manages and subsidizes to provide local public transport service (Table 6). Table 6 Local government-driven 3) Resident-driven: A voluntary facilitation of local public transport by the residents association similar to some rural area application of Community Transport in UK (Table 7). Table 7 Resident-driven

6 4) Partnership-driven: A recent challenge of building partnership which has been observed in some rural areas with high recognition of public transport where the actors involve in managing and operating tasks (Table 8). Table 8 Partnership-driven Upon comparing the given four different role sharing schemes, we can easily conclude that Resident-driven and Partnership-driven prove higher recognition of role sharing other than those by Bus operating company-driven and Local government-driven frameworks of facilitating local public transport services. All these schemes are the challenges of Co-production local public transport management scheme and need to be evaluated by their characteristics and effectiveness in more depth. (b) Club goods like nature of Local Public Transport It is no wrong to accept local public transport services as public goods when considering its two important characteristics of exclusion and competition. The goods with the given two characteristics are called as Club goods (Buchanan, 1987). In the case of public transport services, the exclusion nature arises from the fact that the public transport is provided to those that pay for the service. Competition is also one important aspect which is not strong in the rural areas with lower passenger demand. In the cases that the public transport services are maintained either by fares or subsidies, the problem of free ride of the people residing along the route may be one particular concern. In order to deal with this problem, Club Goods approach is appropriate for internalizing the external effects. For example membership system avoids the use of local public transport services without cost-sharing. (c) Examining the local public transport management and operation scheme by Organization Theory Voluntary activities of public goods are evident when uncertainty exists in providing these goods. Similarly, voluntary public transport services are likely when there is uncertainty and in such cases it is necessary to organize actors cooperating voluntarily for providing services (Yuguchi, 1999). In general, the Japanese examples of Co-production local transport management schemes may be summarized by dividing into three types (Table 9): 1) Organizations based on an area 2) Organizations based on a purpose 3) Organizations led by the local governments Table 9 Organization types and situations of examples

7 1) Organizations based on an area: Resident-driven cases are more common in rural areas. Two important reasons for this are the strong association of the residents that have the potential to manage and operate public transport services. And the other is the fact there have been few cases of bus routes being abolished in such rural areas. Therefore public transport services facilitated by the neighborhood associations and commercial associations as a voluntary Co-production local transport management scheme have appeared in Japanese under-populated areas. 2) Organizations based on a purpose: As one example of NPO activities, any relevant actors or ordinary citizens sharing the same purposes and/or interests for providing public transport services can constitute these organizations. Usually public transport services are determined for a specified area, but there are cases that public services are provided on a particular purpose for example targeting a group of users such as mobility handicapped. This kind of public transport services facilitated by NPO are known as Special Transport Service (STS). 3) Organizations led by the local governments: The two types of Co-production local transport management schemes that we have briefly explained above have been rarely practiced in Japan because in many cases it is difficult to satisfy the facts required to activate such organizations. Therefore in this third type of management scheme local governments that are not financially strong to provide public transport services but willing to play a core role may lead to bring together all the actors or in other words stake holders to initiate organizations for providing an effective public transport service in their areas. (d) Effectiveness of resident and passenger participation Figure 3 presents the concept and effectiveness of stake holder participation and role-shares in managing and operating local public transport facilities. Given follow-up system helps to facilitate better local public transport services and also boosts the profitability by increasing the number of passengers. Therefore we may conclude Co-production local public transport management scheme as financially self-sustained scheme. Figure 3 Follow-up system of stakeholder participation Revised Road Transport Law (2006) defines Co-production with residents by establishing Council of Regional Public Transport among local governments (city, town and village); bus operating companies; national government (Ministry of Land, Infrastructure and Transport); prefecture authorities; road administrator, representatives from residents; and representatives from passengers.

8 Co-production local transport management scheme as a frame that all the relevant actors can involve, will explicitly guide better local public transport facilities. Besides, Council of Regional Public Transport has recently relaxed the licensing procedure for local public transport services providing a ground for better application of Co-production local transport management scheme in many rural areas. However, it is essential to enhance the local governments understanding of the concerning policy-making and also increase the recognition of residents and passengers for local public transport issues. 5. Conclusion This paper presented a scheme (Co-production local transport management scheme) where residents may actively involve in facilitating local public transport services especially in cases that local governments or private operators face financial problems. In Japan, there have been some leading and good practices of collaborative challenges with the participation of all interest groups or stake holders and therefore here we proposed a framework namely Matrix of Administrative Role Sharing for exploring the characteristics and effectiveness of given co-production schemes. Further, Co-production local transport management scheme was examined in more depth by considering its three important aspects: nature of local public transport service (Club goods and Free ride); need for voluntary actions; necessity for voluntary organizational formation. Then the results proved that Co-production local transport management scheme is financially self-sustained and efficient way of providing public transport in rural areas and therefore needs to be encouraged more. For a better utilization of the scheme it is essential that local governments play a central and leading role in organizing all the stakeholders and potential actors. Revised Road Transport (2006) introduced Council of Regional Public Transport for systematically guiding the local governments to widely and efficiently employ the Co-production local transport management scheme. And it is also timely important to guide the local governments especially those for the rural areas for a better understanding of policy making on public transport facilities.

9 References H. Kato, D. Takasuga (2003) An Upward Process Management Scheme in order to Create Self-controlled Local Transit System under Deregulated Situation, Proceedings of Infrastructure Planning (Japan Society of Civil Engineers), vol.34, CD-ROM. (In Japanese) D. Nakagawa, S. Noumura (2003) Possibility and Assignments of Bus Support Projects by Citizen s Organization under the Deregulated Conditions, Proceedings of Infrastructure Planning (Japan Society of Civil Engineers), vol.34, CD-ROM. (In Japanese) D. Gillingwater, J. Sutton (1995) Community Transport: Policy, Planning, Practice, Gordon and Breach Publishers. Department for Transport and Greater Manchester Passenger Transport Executive (2004) INTERMODE: Innovations in Demand Responsive Transport J. M. Buchanan (1987) Economics: Between Predictive Science and Moral Philosophy, Texas A&M Press. K. Yuguchi (1999) Is it possible to provide Public goods voluntary? Theoretically framework, Japan Society of Transportation Economics review 1998, pp (In Japanese)

10 400 Passengers (hundred million) Private car Bus (Year) Figure1 Changes of private car and bus passengers Table1 Changes of bus subsidization systems to bus operation in Japan Year Contents 1966 Start of subsidization for bus operated by private corporations in islands and rural areas 1970 Subsidization for publicly-operated bus was introduced 1972 Subsidization for rural areas privately-operated bus operation was introduced 1995 Subsidization for publicly-operated bus was incorporated into the general account budget 2001 Subsidization for rural areas privately-operated bus was revised completely 2002 Road Transport Law was revised (Deregulation for regional bus in Japan) 2006 Road Transport Law was revised ( Council of Regional Public Transport system was introduced) Subsidy (hundred million yen) (Year) Subsidization for bus operated by private corporation in islands and rural areas Subsidization for rural areas privately-operated bus Subsidization for publicly-operated bus Figure2 Changes in amount of subsidy to bus (National budget only)

11 Step Scheme General system Separation of roles by each step Table 2 The steps of bus service provision Planning (Determining route and schedule) Management (Accounting and managing staffs and vehicles) Bus operating company Local governments Local governments Local governments Local governments Commercial companies Commercial companies Residents etc. Residents etc. Operation (Service provision and fare collection) Bus operating company Bus operating company Neighborhood associations etc. Key roles Providing personal resources Sharing operation cost Deeper recognition Disclosing opinions Table 3 Classification of key roles Contents Planning: Determining route and schedule Management: Accounting and managing staffs and vehicles Operation: Service provision and fare collection Support: Providing know-how Assistance: cooperate with operation, P.R., sales. Fare paid by passengers Financial aid by sponsors Recognition of necessity of bus service and their current situation Recognition of necessity of bus service Constructive opinions Self-serving opinions Complaints Table 4 Matrix of Administrative Role Sharing Key roles Providing personal resources Sharing operation cost Deeper recognition Disclosing opinions Local government Bus operating company Actors Commercial companies, hospitals etc. Residents Passengers :Contribute positively :Contribute :Contribute in special cases

12 Table 5 Bus operating company-driven Local government Providing personal resources Sharing operation cost Deeper recogniti on Disclosin g opinions Table 6 Local government-driven Providing personal resources Sharing operation cost Deeper recogniti on Disclosin g opinions Local government Bus operating company Commercial companies, hospitals etc. Bus operating company Commercial companies, hospitals etc. Residents Residents Passengers Passengers Table 7 Resident-driven Table 8 Partnership-driven Providing personal resources Sharing operation cost Deeper recogniti on Disclosin g opinions Providing personal resources Sharing operation cost Deeper recogniti on Disclosin g opinions Local government Bus operating company Local government Bus operating company Commercial companies, hospitals etc. Commercial companies, hospitals etc. Residents Passengers Residents Passengers Table 9 Organization types and situations of examples Area Un certainly of local public transport service provision Organizatio n type Example Pop. Density of pop. (per km 2 ) Bus (Operated by private company) Measures for public transport problems (performed by local government) Organization to manage and operate Participated stakeholders Organizatio ns based on an area Residents association owned bus Maizuru city, Kyoto pref. 16, Abolish Not provide Residents association Residents, passengers and local government Residents, passengers, Organizatio ns based on a purpose Seikatsu-Bu s Yokkaichi Yokkaich i city, Mie pref. 15,060 1,711 Abolish Not provide NPO commercial companies, local government and bus operating company Local government, Organizatio ns led by the local government s Suzunone-B us Matsusa ka city, Mie pref. 67,070 2,080 Not exist Not bear alone Local government residents, commercial companies and hospitals, commercial association and bus operating company

13 Heightening of consciousness Promotion using service Participation to manage, support and assist activities Disclosing opinions Figure3 Follow-up system of stakeholder participation Growing convenience